PLI Scheme Drives Robust Growth in India’s Solar Manufacturing Sector: Report
JMK Research–IEEFA report highlights sharp growth in domestic solar PV manufacturing while flagging policy, upstream integration and cost challenges
India’s Production Linked Incentive (PLI) scheme for high-efficiency solar photovoltaic (PV) modules has emerged as a key catalyst in building domestic manufacturing capacity, significantly strengthening the country’s renewable energy supply chain, according to a new report by JMK Research and the Institute for Energy Economics and Financial Analysis (IEEFA).
Launched in 2021 with an initial outlay of ₹4,500 crore, the solar PLI scheme received an overwhelming response from industry players, prompting the government to enhance the allocation by an additional ₹19,500 crore in 2022. The total outlay now stands at ₹24,000 crore, underscoring the Centre’s commitment to achieving self-reliance in solar manufacturing under the broader Atmanirbhar Bharat framework.
The report notes that the scheme has successfully channelled government support toward measurable industrial output, helping create long-term and durable manufacturing capacity in the solar sector. “The scheme channels government support towards measurable industrial output, helping build durable, long-term manufacturing capacity,” said Vibhuti Garg, Director, IEEFA South Asia, and a contributing author of the report. However, she cautioned that the sustainability of these gains will depend on continued policy coherence, effective capital mobilisation and deeper upstream integration.
As of June 2025, India’s solar PV manufacturing ecosystem has expanded across the entire value chain. Operational capacities have reached 3.3 gigawatts (GW) for polysilicon, 5.3GW for wafers, 29GW for solar cells and a substantial 120GW for modules. The report highlights that the PLI scheme has been instrumental in driving the development of upstream capacities, which were largely absent in the country earlier.
India’s solar manufacturing capacity has witnessed particularly sharp growth since 2022. Current operational capacity stands at 120GW for modules and 29.3GW for cells. Capacity additions after 2022 alone totalled 82GW in modules and 22.7GW in cells, representing an increase of 216 per cent and 344 per cent respectively over 2022 levels.
Despite these achievements, the report points out that the full potential of the PLI scheme is yet to be realised. Delays in upstream integration, policy uncertainties, technical constraints and volatility in global raw material prices continue to pose challenges for manufacturers. These factors have impacted project timelines and cost competitiveness, especially in capital-intensive segments such as polysilicon and wafer manufacturing.
The report recommends that future iterations of the PLI scheme adopt a more comprehensive, manufacturing-linked framework. Suggested measures include upfront capital subsidies, support for ancillary industries, longer policy tenures and stronger alignment between fiscal incentives and domestic demand creation.
Overall, the PLI scheme has reinforced the government’s push for self-sufficiency by triggering a surge in domestic module capacity and attracting fresh investment into the sector. With sustained policy support and improved integration across the value chain, the report concludes, India has the potential to emerge as a globally competitive hub for solar PV manufacturing.
The writer of this article is Dr. Seema Javed, an environmentalist & a communications professional in the field of climate and energy
